Vijay Sekhar Sharma, CEO and Founder of One97 Communication, stepped down from the Paytm Payments Bank Board amid the decision to reconstitute the board. This is due to the Reserve Bank of India imposing various restrictions on Paytm Bank’s operations following its non-compliance with certain guidelines laid down by the RBI, and audit reports by external auditors show non-compliance and supervisory concern for the bank and its operations.

The new independent directors of Paytm Payment Bank’s Board include Debendranath Sarangi (IAS retd.), Ashok Garg (former director of Bank of Baroda), Rajni Sekhri, and Debendranath Sarangi.

Further, from February 29, Paytm Payments Bank will stop accepting credit transactions and deposits from customers. The date of February 29 has been extended to March 15.

The irregularities found by RBI in various instances, such as Know Your Customer (KYC) norms, are that the same permanent account number is added to multiple accounts, which will end up creating a risk factor for depositors and wallet holders. The RBI further stated that these actions are necessary following the months and years of engagement, and sufficient time was also given by the RBI to take corrective action in order to protect the stability of the financial system as well as the customers of the bank.

The RBI Governor also stated not to worry about the entire financial system; it is just a corrective action against a specific institution. The RBI governor also highlights that the RBI has deepened its supervisory mechanisms, will work toward a stable financial system, and will protect customers from any unforeseen events.